Exhibit 99.2
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Revenue | $ | 78,479 | $ | 56,612 | $ | 151,441 | $ | 106,663 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of operations | 29,956 | 25,716 | 59,619 | 50,426 | ||||||||||||
Sales and marketing | 21,929 | 16,932 | 44,799 | 32,469 | ||||||||||||
General and administrative | 15,981 | 12,565 | 31,486 | 24,455 | ||||||||||||
Depreciation and amortization | 6,942 | 4,013 | 12,935 | 7,542 | ||||||||||||
Interest income | 3,051 | 1,468 | 5,036 | 2,916 | ||||||||||||
Income (loss) before income tax provision | 6,722 | (1,146 | ) | 7,638 | (5,313 | ) | ||||||||||
Income tax provision (benefit) | 1,332 | (293 | ) | 1,542 | (1,401 | ) | ||||||||||
Net income (loss) | $ | 5,390 | $ | (853 | ) | $ | 6,096 | $ | (3,912 | ) | ||||||
Net income (loss) per common share: | ||||||||||||||||
Basic | $ | 0.09 | $ | (0.02 | ) | $ | 0.11 | $ | (0.07 | ) | ||||||
Diluted | $ | 0.09 | $ | (0.02 | ) | $ | 0.10 | $ | (0.07 | ) | ||||||
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share: | ||||||||||||||||
Basic | 57,071 | 56,054 | 57,023 | 56,054 | ||||||||||||
Diluted | 59,748 | 56,054 | 59,689 | 56,054 | ||||||||||||
WEBMD HEALTH CORP.
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Revenue | ||||||||||||||||
Online Services: | ||||||||||||||||
Advertising and sponsorship | $ | 52,436 | $ | 36,219 | $ | 99,857 | $ | 68,979 | ||||||||
Licensing | 19,799 | 12,304 | 39,914 | 23,746 | ||||||||||||
Content syndication and other | 653 | 1,096 | 1,537 | 1,972 | ||||||||||||
Total Online Services | 72,888 | 49,619 | 141,308 | 94,697 | ||||||||||||
Publishing and Other Services | 5,591 | 6,993 | 10,133 | 11,966 | ||||||||||||
$ | 78,479 | $ | 56,612 | $ | 151,441 | $ | 106,663 | |||||||||
Earnings (loss) before interest, taxes, depreciation, amortization and other non-cash items (“Adjusted EBITDA”) (a) | ||||||||||||||||
Online Services | $ | 14,042 | $ | 9,006 | $ | 27,034 | $ | 16,867 | ||||||||
Publishing and Other Services | 1,113 | 593 | 728 | (741 | ) | |||||||||||
15,155 | 9,599 | 27,762 | 16,126 | |||||||||||||
Adjusted EBITDA per basic common share | $ | 0.27 | $ | 0.17 | $ | 0.49 | $ | 0.29 | ||||||||
Adjusted EBITDA per diluted common share (c) | $ | 0.25 | $ | 0.17 | $ | 0.47 | $ | 0.28 | ||||||||
Interest, taxes, depreciation, amortization and other non-cash items (b) | ||||||||||||||||
Interest income | 3,051 | 1,468 | 5,036 | 2,916 | ||||||||||||
Depreciation and amortization | (6,942 | ) | (4,013 | ) | (12,935 | ) | (7,542 | ) | ||||||||
Non-cash advertising | — | (1,189 | ) | (2,320 | ) | (2,794 | ) | |||||||||
Non-cash stock-based compensation | (4,542 | ) | (7,011 | ) | (9,905 | ) | (14,019 | ) | ||||||||
Income tax (provision) benefit | (1,332 | ) | 293 | (1,542 | ) | 1,401 | ||||||||||
Net income (loss) | $ | 5,390 | $ | (853 | ) | $ | 6,096 | $ | (3,912 | ) | ||||||
Net income (loss) per common share: | ||||||||||||||||
Basic | $ | 0.09 | $ | (0.02 | ) | $ | 0.11 | $ | (0.07 | ) | ||||||
Diluted | $ | 0.09 | $ | (0.02 | ) | $ | 0.10 | $ | (0.07 | ) | ||||||
Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share: | ||||||||||||||||
Basic | 57,071 | 56,054 | 57,023 | 56,054 | ||||||||||||
Diluted | 59,748 | 56,054 | 59,689 | 56,054 | ||||||||||||
(a) | See Annex A — Explanation of Non-GAAP Financial Measures | |
(b) | Reconciliation of Adjusted EBITDA to net income | |
(c) | Three and six months ended June 30, 2006 Adjusted EBITDA per share is calculated based on 58,092 and 57,905 diluted shares, respectively |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
June 30, | December 31, | |||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 213,357 | $ | 44,660 | ||||
Short-term investments | 26,900 | 9,490 | ||||||
Accounts receivable, net | 81,933 | 89,652 | ||||||
Current portion of prepaid advertising | 2,363 | 2,656 | ||||||
Due from HLTH | — | 143,153 | ||||||
Other current assets | 5,232 | 5,360 | ||||||
Total current assets | 329,785 | 294,971 | ||||||
Property and equipment, net | 48,071 | 44,709 | ||||||
Prepaid advertising | 7,433 | 9,459 | ||||||
Goodwill | 221,356 | 225,028 | ||||||
Intangible assets, net | 42,835 | 45,268 | ||||||
Other assets | 499 | 530 | ||||||
$ | 649,979 | $ | 619,965 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accrued expenses | $ | 24,459 | $ | 32,846 | ||||
Deferred revenue | 88,251 | 77,731 | ||||||
Due to HLTH | 4,259 | — | ||||||
Total current liabilities | 116,969 | 110,577 | ||||||
Deferred tax liability | 5,944 | 5,367 | ||||||
Other long-term liabilities | 9,655 | 7,912 | ||||||
Stockholders’ equity | 517,411 | 496,109 | ||||||
$ | 649,979 | $ | 619,965 | |||||
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Six Months Ended | ||||||||
June 30, | ||||||||
2007 | 2006 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 6,096 | $ | (3,912 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 12,935 | 7,542 | ||||||
Non-cash advertising | 2,320 | 2,794 | ||||||
Non-cash stock-based compensation | 9,905 | 14,019 | ||||||
Deferred income taxes | 577 | (1,413 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 7,719 | 4,221 | ||||||
Other assets | (44 | ) | (2,945 | ) | ||||
Accrued expenses and other long-term liabilities | (7,271 | ) | (1,364 | ) | ||||
Due (from) to HLTH | 2,136 | (667 | ) | |||||
Deferred revenue | 10,519 | 9,984 | ||||||
Net cash provided by operating activities | 44,892 | 28,259 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale securities | 95,256 | 171,000 | ||||||
Purchases of available-for-sale securities | (112,667 | ) | (192,000 | ) | ||||
Purchases of property and equipment | (9,764 | ) | (12,775 | ) | ||||
Cash paid in business combinations, net of cash acquired | — | (65,568 | ) | |||||
Net cash used in investing activities | (27,175 | ) | (99,343 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 5,723 | — | ||||||
Net cash transfers with HLTH | 145,257 | — | ||||||
Net cash provided by financing activities | 150,980 | — | ||||||
Net increase (decrease) in cash and cash equivalents | 168,697 | (71,084 | ) | |||||
Cash and cash equivalents at beginning of period | 44,660 | 75,704 | ||||||
Cash and cash equivalents at end of period | $ | 213,357 | $ | 4,620 | ||||